If you’ve ever gotten an advertisement in the mail from an investment advisor or other professional telling you that you are invited to sit down with them or as a group for a free lunch to learn about securing your wealth or investments, you should run far, far away. These “free lunches” are filled with slick pitches from commissioned sales persons and could potentially be one of the most expensive meals you’ll ever eat.
Typically, there are two different ways that this rip-off plays out. In the first, a commissioned investment advisor will invite you to lunch, and present the different financial products that they have to offer. These could be insurance, retirement accounts, or just about anything. They have a very finely rehearsed sales-pitch which gets a lot of people who would likely never buy anything to buy a financial product that they really don’t need. These meals are often targeted at seniors who are more inclined to feel obligated to purchase something since the individual bought them a meal
The other variation of this rip-off involves getting an invitation in the mail for something that’s billed as a “wealth protection seminar” or an “income security seminar.” They’re billed as group dinners that will help you to protect your wealth or income, and promise that nothing is ever sold. They are very reminiscent of common hotel-ball room type events where people are sold into buying into multi-level marketing businesses, zero-down real estate businesses, and other high-promise low-results businesses.
During both of these types of dinners, you’ll be pitched a lot of financial products which are extremely high in fees and commissions. Just about anything you’ll hear about during one of these lunches or seminars are a rip-off. Whether it’s an insurance policy, an investment plan, or something else, chances are you shouldn’t buy it.
A group called the National American Securities Administration Association did a study of these seminars, and found that 50% of them of having false or exaggerated advertising. The study also found that 25% of these seminars promoted financial products which are completely inappropriate for the person being pitched to, and 13% of them are engaged in pure, unadulterated fraud.
If you are in need of a financial advisor to help you figure out a few things about your finances, find a fee-only financial advisor in your area. These types of advisors do not earn commissions by selling financial products, rather you are merely paying for their advice, so there is no incentive for them to sell you something that would not be appropriate in your situation.
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